Spectrum Global Solutions Announces Transition Services Agreement with High Wire Networks

Rhea-AI Summary

Spectrum Global Solutions Inc. (OTCQB: SGSI) has entered into a Transition Services Agreement with High Wire Networks Inc. to facilitate their merger. This agreement allows Spectrum to record High Wire's EBITDA as its own revenue, enhancing its financial position. During the past year, the combined entities generated over $40 million in revenue despite COVID-19 challenges. The management is optimistic about leveraging synergies to drive growth while awaiting PPP loan forgiveness from the SBA.

Positive

• Entry into Transition Services Agreement with High Wire Networks to leverage synergies.
• Ability to record High Wire's EBITDA as revenue, improving financial reporting.
• Combined revenue of over $40 million in the last 12 months despite COVID-19 disruptions.

Negative

• Awaiting PPP loan forgiveness from the SBA may delay merger closing.

Interim Agreement Enables Company to Receive Benefits of Merger in Advance of Closing

BOCA RATON, Fla., and BATAVIA, Ill, May 12, 2021 (GLOBE NEWSWIRE) -- Spectrum Global Solutions Inc. (the "Company" or "Spectrum") (OTCQB: SGSI), a single-source provider of next-generation communications network and professional services to telecommunications and enterprise markets, announces today the Company’s entry into a Transition Services Agreement (the “Agreement” or “TSA”)  with High Wire Networks Inc. (“High Wire”).  This Agreement will help govern the relationship between the Company and High Wire as the parties await satisfaction of certain closing conditions set forth in their previously announced Merger Agreement. 

High Wire is a global provider of managed security, professional services and commercial/industrial electrical solutions delivered exclusively through a channel sales model. High Wire’s Overwatch managed security platform-as-a-service offers organizations end-to-end protection for networks, data, endpoints, and users via multiyear recurring revenue contracts in this fast-growing technology segment. Going forward, as part of the TSA, Spectrum will be able record the EBITDA of High Wire as revenue on its own financial statements.

“As we await PPP forgiveness from the SBA, we are moving forward with our transformation of Spectrum, said Mark Porter, CEO of High Wire. “While the SBA might have delayed our Closing, there is much work that can be done to leverage the synergies of our two companies, ignite our respective sales and accelerate our upward trajectory. During the trailing 12 months, the combined entities currently under SGSI management produced over $40 million in revenue while fighting business disruptions headwinds from COVID 19.  The new management team has worked hard to streamline, and are already seeing progress as those headwinds ease, paving the way for significant growth.

About Spectrum Global Solutions
Spectrum Global Solutions Inc. operates through its subsidiaries ADEX Corp., Tropical Communications Inc. and AW Solutions Puerto Rico LLC. The Company is a leading provider of telecommunications engineering and infrastructure services across the United States, Canada, Puerto Rico and Caribbean. For more information about the Company and its technologies visit the Company’s public filings at www.SEC.gov or the Company’s website at https://SpectrumGlobalSolutions.com/

About High Wire Networks
For 20 years, High Wire Networks has been a trusted partner to VARs, MSPs, distributors, integrators, manufacturers, and telecom providers by enabling them to minimize overhead while extending delivery capabilities around the world. Our flexible workforce delivers vendor-agnostic technical field, professional and security services in more than 180 countries. Our services include design, installation, configuration, and support for unified communications, wired and wireless networks, cabling and infrastructure, and electrical systems. Our new Overwatch Managed Security Platform-as-a-Service enables our partners to deliver comprehensive cybersecurity that’s easy to sell and easy to buy for an affordable subscription. We also offer a variety of on-demand, rapid-response solutions with service levels ranging from two hours to the next business day for onsite break-fix and remote technical support. With High Wire Networks, partners Get Work Done. Learn more at http://www.highwirenetworks.com

Forward-Looking Statements:
The above news release contains forward-looking statements. The statements contained in this document that are not statements of historical fact, including but not limited to, statements identified by the use of terms such as "anticipate," "appear," "believe," "could," "estimate," "expect," "hope," "indicate," "intend," "likely," "may," "might," "plan," "potential," "project," "seek," "should," "will," "would," and other variations or negative expressions of these terms, including statements related to expected market trends and the Company's performance, are all "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. These statements are based on assumptions that management believes are reasonable based on currently available information, and include statements regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performances and are subject to a wide range of external factors, uncertainties, business risks, and other risks identified in filings made by the company with the Securities and Exchange Commission. Actual results may differ materially from those indicated by such forward-looking statements. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based except as required by applicable law and regulations.

Investor Relations
Spectrum Global Solutions
www.SpectrumGlobalSolutions.com/ 
561-672-7068 

Media Relations
Susanna Song
Director of Marketing and Communications
High Wire Networks
630-635-6717 
susanna.song@highwirenetworks.com

FAQ

What is the significance of the Transition Services Agreement for SGSI?

The Transition Services Agreement allows SGSI to record High Wire's EBITDA as revenue, positively impacting its financial statements.

How much revenue did SGSI generate in the last year?

SGSI and High Wire combined produced over $40 million in revenue during the past year.

What challenges did SGSI face recently?

SGSI faced business disruptions due to COVID-19 but is optimistic about post-pandemic recovery.

What is the current status of SGSI's merger with High Wire?

The merger is pending the satisfaction of certain closing conditions, including PPP loan forgiveness.